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Options for National Fundraising Regulations Outlined in New Discussion PaperTuesday, 14th February 2012 at 10:42 am

A new discussion paper examines proposals for a consistent approach to laws that govern charitable fundraising

A range of reforms proposing a consistent national approach to fundraising regulation for Australian charities have been outlined in another Discussion Paper released by Federal Treasury.

The paper, Charitable fundraising regulation reform, examines proposals for a new, nationally-consistent approach to the laws that govern charitable fundraising and seeks the community's views on a range of issues, including any potential exemptions for smaller charities, regulation of the conduct of fundraisers, the use of Internet fundraising and fundraising by third parties on behalf of charities.

Parliamentary secretary to the Treasurer David Bradbury says that charities would face less red tape when fundraising and people would have more certainty about how the money they donate is being spent under the new regulations.

"Almost every state and territory has a law regulating fundraising by charities," Bradbury said.

"These differences create a compliance burden for those charities that raise funds in more than one state or territory.

"Under the proposals, charities would only need to comply with one law, no matter where in Australia they conduct their fundraising activities."

Bradbury said that the Productivity Commission recommended reform of Australia's fundraising laws to reduce the regulatory burden on the Not for Profit sector in its 2010 report, Contribution of the Not-for-profit sector.

“These proposals are now being advanced in the spirit of the National Compact that was made between the Government and the Not for Profit sector," he said.

The key points of the proposed framework are that fundraising regulation would apply to those entities registered as a charity by the Australian Charities and Not-for-profits Commission (ACNC) that engage in fundraising activities for a charitable purpose and that charities whose annual fundraising activities exceed the proposed threshold of $50,000 or who fundraise over the internet will be required to register with the ACNC.

The ACNC would also have oversight of the national framework and provide a 'one-stop shop' for reporting on fundraising by charities.

The Discussion Paper says that “assuming that charities that are registered with the ACNC are also authorised for the purposes of fundraising activities, there is likely to be a need to have legislative power to ban a charity from fundraising activities in certain circumstances, such as insolvency or if there is evidence that there has been significant wrongdoing in the course of fundraising. It is proposed that the ACNC would have the power to ban a charity from fundraising activities. However, any decision by the ACNC would be reviewable by the Courts."

In relation to Internet fundraising the Paper says that “due to the higher risks posed by Internet and electronic fundraising, it is proposed that fundraising over the Internet for charitable purposes be prohibited unless an entity is registered with the ACNC."

It says this is proposed mainly due to the authenticity issues associated with Internet and electronic fundraising, and the potential for these technologies to be utilised for large scale scams. It is also proposed that all charities engaging in electronic fundraising must state their ABN in all communications with members of the public.

Another regulatory option could be to require third party fundraisers registering separately with the ACNC. This would provide information and allow the ACNC to take action directly against a third party fundraiser that breaches fundraising laws. The views of stakeholders are specifically sought on this possibility.

Bradbury said that the government was committed to working with the states and territories to develop a more “streamlined, national approach to fundraising regulation".

"Improving transparency and information disclosure, as well as making regulation consistent across Australia, not only has the potential to cut red tape for the sector but it will also help to ensure that when making a donation, people have confidence that the money they are contributing will go towards their chosen charity programs," he said.

Pro Bono Australia News reported in January on the tight time frame of consultation introduced by the Federal Government as part of its Not for Profit reform process.

Here’s a snapshot of the Government’s updated agenda:

extending the closing date for submissions on the exposure draft of the ACNC legislation to 27 January 2012

extending the closing date for submissions on the consultation paper on the governance framework for the NFP sector to 27 January 2012

the release of a discussion paper on the design of ACNC administrative systems. The closing date for submissions on this paper is 27 February 2012

further consultation on the better targeting of NFP tax concessions measures is proposed for early 2012

an exposure draft of a proposed definition of charity is due for release for public consultation around mid-2012

a second exposure draft for consultation on the 'in Australia' principle is expected in early 2012

working with the states and territories towards national regulation for the NFP sector

a discussion on the NFP reforms and how they fit together.

Submissions relating to Charitable fundraising regulation reform are due by April 5, 2012.